this is business asia. is the chairman of cathay pacific airways john sloss has become the 2nd top figure to resign from the hong kong based care after the airline c.e.o. had its own organs sixteen's following pressure by beijing over participation of allen employees in anti-government protests meanwhile it has emerged that china is giving less business to hong kong due to its trade war with the u.s. as well as the ongoing pro-democracy protests that nearly half of respondents to the latest hong kong purchasing managers index reported lower demand from china the city has long been a financial hub for the mainland but it is also an off shore haven for many of china's elites as a new study shows and the suggest may force beijing's hand to be more lenient with hong kong's protesters we want to talk to the author of that study in a moment but 1st this report. stocks have fallen the airport brought to a standstill business orders are now dropping protesters in hong kong are targeting

china by paralyzing its biggest financial hub. yet hong kong doesn't care the way that used to industrial mainland cities like want joe and shun journ now rival its economic output. but hong kong separate legal and financial systems offer something those cities don't protection from beijing's reach for chinese political elites in need of sheltering cash that's no small consideration financial reporting in hong kong suggests that almost 60 percent of the $550000000000.00 in hong kong financial trusts comes from local and chinese sources that means party elites in china have other interests in hong kong besides the economy and that in turn could help shape beijing's response to the ongoing protests. and the author of that paper is under have been there she is with the global public policy institute in berlin and joins me in the studio. so you're right you say that china's elite will prevent

the chinese government from removing hong kong special status what exactly have you found and how odd how good is your evidence. ok so. what i do is that i study the power relationship between offshore finance and to state and the relationship between china and hong kong is a perfect case study for that shit and so what i found in the case of hong kong is that wealthy chinese indeed hold their money in trusts in hong kong hong kong as you said is an offshore heaven so the idea is to make wealth invisible so it's always very difficult to find very hard evidence and who's holding which money how do they make that invisible how does that work with funds what how does that yes so what they're various different legal structures but their most famous one is the trust and the trust is the idea to distance the owner of something from

what they own so for instance shares or oddball collar cash whatever you want to you put it in a trust you no longer legally the owner but you can name a beneficiary and that person can use the wealth in that in that trust as if they were the owner but since they're legally speaking not the owner they're not liable to taxation and it's different regulations so and so forth and the trust industry is very strong in hong kong they hold about 3 trillion. s. of management 3 trillion u.s. dollars and 330000000000 to 10 percent is held in trusts and these $330000000000.00 do belong to chinese mainland how do you connect these 2 to the chinese mainland both the people. so it would be the dry means wealthy do not are not the beneficiaries of the trust all that well this children their cousins so usually it's family members that are the beneficiary so maybe also

like a lot of us and there's someone like that. but there are 2 ways so one is that the hong kong monetary with. he's published a survey on private wealth management in the city and in that survey you can find 330000000000 held in trust so this is reported so it's very likely that it's held by my and then chinese and hong kong chinese and then also we have leaks like the pentagon papers. international consortium of investigative journalists found that $16500.00. shell companies was set up in hong kong on behalf of men and chinese elites they could link those shell companies to family members of people who are part of party ruling party or communist yes and. so what you're saying is basically that the senior party members of the communist

party in beijing have money stashed away in hong kong what makes him so different impressions from mainland chinese investors. so what makes hong kong precious and unique it's on the one hand it's the. center like many others the city of london panama cayman islands in the region singapore. and so the way that works is you have to have a separate legal system and a separate monetary system which allows from the mainland which allows you to circumvent banking regulations tax laws and so so forth and thereby to accumulate capital more quickly so you get richer more quickly but what makes hong kong special is that despite their separate legal and monetary system they're under chinese political control so politically to money's safe but they haven't in any other and very briefly do you think the elite has already been forcing beijing

sound. i think it's not correct to say that they force pages hands i think what's correct to say is that the political and economic elites are so interlinked in china that the people who take the political decisions have a different private interest and they have a political interest and the interesting question is which one will prevail is it the political or the private interest i think the fact that. china of aging particularly has been taking a step back today with. taking back the notion of bill may be one result of these facts and i have been to thank you very much for this very interesting insight thank you. everyone knows that keeping a straight face is important when doing business in china you can even pay for your shopping with your facial features soon the country is embracing facial payment

technology despite privacy concerns. shoppers strike a pose in front of a camera and smiling to the point of sale machine the image links to a digital payment system or a bank account payment is made on the shopper walks out with their freshly purchase goods. in china mobile payment is already among the most advanced in the world but this makes paying even easier. it's convenient because you can buy things very quickly it's different from payment in the traditional supermarket in which you have to wait in the checkout line down. the designers of the system i for you go say it is extra safe because it avoids the need for a password all the severe cases of which you'll be out facial recognition payment is different we can complete the payment with our faces which is very important for the safety of our account and the world. among the companies rolling out the

new tech is that we don't bakery it is spatial payment machines in hundreds of stores across china so this is a world i don't even have to bring a mobile phone with me i can go out and shop without bringing anything this was not possible either at the earliest stage of cash payment or mobile payment to those because what all. i for is mainly focused on man stores others working on the tech include ali baba's financial pay which is devices in 100 cities it may mark a major technological advance but the software is not uncontroversial face recognition tech is already widely used to monitor dissent. and off to some of the other global business stories making the news today that japanese car sales in south korea have plummeted 57 percent in august from a year earlier hit by a consumer boycott of japanese metal worsening diplomatic route between the countries south korea and sales for 59 percent while honda motor sales tumbled 81

percent according to the survey. india prime minister narendra modi has arrived in the far eastern russian city of stock for 3 days for modi was greeted by russian president vladimir putin before the pair departed by boat for further talks. to discuss their 2 countries deepening operations in the oil and natural gas sectors. india's car industry is in the middle of its worst crisis for many years carmakers are reacting to dwindle exams by throttling production and laying off thousands of workers until recently the sector was a beacon of hope for in india's economy now not anymore what went wrong. in the town of money on the outskirts of new delhi is home to. biggest production plant india's number one automaker so august sales drop over 30 percent year on year forcing it to slash jobs next morning it will get out because of the current

recession companies have been cutting back and i was on the ones who lost a job he commuted so i've been forced to come here and seek work as a day laborer on the other side of a company even as india's economic growth slows consumers are buying fewer vehicles national cars sales have been falling for 9 consecutive months it's the industry's worst crisis for 18 years millions of jobs could be at stake. and you'll be supporting employment of 37000000 people that is the end of it so in this industry goes down everything is in right we're no longer employed and getting back into the initial the coming years and try to continue to fuel the country with better. order to bomb the been the cycle risk industry is of day were of for called economy as a home business is all across minus sa a now feeling the pinch bay previously benefited from the launch number of migrant workers he would drawn here by the car industry but now those numbers a dwindling little solve the goes of they'd give us in that there are no doubt rice

is is very obvious here elin in the year though mining germs being close in half there was a nigga we used to have a lot of labor as living in a now they've left i'm there's no want to buy our stuff out of the domino effect means the problems of the car industry are effect you all business is in the area pressure is growing on the indian government to do something to boost the economy as a whole said far me and the business before that you go over the world markets at this thanks for watching

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this is did over the news live from baghdad britain's prime minister calls for an election to break the back set log bars jones who comes out of high tech after suffering and pain to defeat intolerance on tuesday the challenge is the officers will agree to an election next month also on the program the scale of the disaster caused by how to control in the bahamas begins to emerge tens of thousands of homes have been destroyed huge numbers of people without.